Category Archives: Home Maintenance

So You Wanna Buy a House? Step 8: Ace the Inspection

Inspections can be a big hurdle in buying or selling a home. Jamie Wiebe from Realtor.com explains how to “Ace the Inspection.” Here in Summit County I can recommend great inspectors and handymen for anything that may arise from the inspection. You can contact me here.


So You Wanna Buy a House? Step 8: Ace the Inspection

By
Jamie Wiebe

Pamela Moore/iStock

A home inspection can be a terrifying process to newbie buyers: What if the house you adore has major problems hiding beneath that shiny new coat of paint? If you lie awake haunted by visions of mold or “foundation issues,” it’s time to take a deep breath. This installment of our weekly 2016 Home-Buying Guide illuminates everything you need to know about home inspections, and how (as scary as they might seem) they exist to protect you from a very bad deal.

Here are some insights into how to make the most of this all-important step. OK, exhale.

Hire a top-notch inspector

While it may be tempting to hire any run-of-the-mill home inspector to get the job done—particularly if the price is right—the inspection is no time to cut corners. After all, buying a home is an enormous investment. “Everyone does themselves a disservice when they shop by price alone,” says Alan Singer of Sterling Home Inspections in Armonk, NY. “Plenty of inspectors don’t know what they’re doing and set up shop because it’s easy to do.”

So, first, check your local requirements: Many states require an inspector to have a license or insurance, and not having either is a big, waving red flag. Even if insurance is not mandated, you’re better off choosing an inspector who is insured, which protects both of you against errors and omissions. Membership in a professional trade organization, such as the National Association of Home Inspectors, indicate the inspector is up-to-date on the latest developments in the field—another giant plus.

Attend the inspection

Even though you will receive a written report after the inspection, you should attend the inspection while it’s being done. It provides a valuable opportunity to learn all about the inner workings of your would-be new home. “I much prefer it when buyers are there so we can discuss the home in person,” Singer says. “It’s much easier to explain the ramifications of an issue when we’re standing in front of it.” Plus, it sure beats deciphering a 10-page report about HVAC or plumbing problems.

So, don’t be afraid to ask questions. Really stick your nose into the inspection. You and your inspector will be looking at all sorts of things you might have skipped during your showings, like the attic and crawl space, and under the sinks. Don’t be scared to delve into the details. Even the best home will receive a laundry list of to-do’s and potential problems, and fixing them will be much easier with a hands-on understanding of the issues involved. Consider it free (and invaluable) fix-it advice.

Don’t panic (until it’s time to panic)

The vast majority of issues raised during an inspection are reparable—after all, as Singer describes it, you’re buying a “used home.” Just like a used car or an old computer or second-hand clothing, there are bound to be problems. Some of them may be small and easily fixed, like leaky pipes and rattling doorknobs. But if an inspector discovers a majorproblem—with, say, the foundation or water intrusion—even that may not be a deal killer. In fact, it could be a bargaining chip you can discuss with the sellers before closing the deal.

Work with your real estate attorney and agent to determine the best approach. If your offer was contingent on a successful inspection (and most are), you have a good basis to request that the current owners make repairs before closing. You’ll want to get this in writing, along with provisions if the sellers fail to fix the problems.

But there’s no obligation for sellers to address the inspector’s discoveries. If they aren’t willing to shoulder the burden, you need to assess whether the cost of a new roof—or mold abatement, or fixing the foundation, or whatever the problem is—is worth the reward. With no solution beyond paying $30,000 from your own pocket, you might need to move on to a more habitable home. “People get very invested in the home they want to buy, and it all becomes a very overwhelmingly emotional experience,” Singer says. “But they need to listen to the advice of the inspector, take a look at the financial ramifications, and make a clear-headed decision.”

Hopefully, all will go well and your inspector will say it’s fine to move in. At that point, most homeowners move on to an even more intimidating step: Locking in the terms of their home loan. Stayed tuned for that installment of our Home-Buying Guide next week.

The Pros and Cons of Investing in a Vacation Home

“It is less expensive to stay in hotels in various destinations than it is to upkeep a home, including the hidden expenses of caretaking, overall operations of a home and property taxes,” she cautions. “However, for those that are able to enjoy it, it is definitely worth The Pros and Cons of Investing in a Vacation Home

Your home will always be one of your best investments, but a vacation home may not be.

By Jeff Brown | Contributor

For the winter weary, February is the perfect month to head for the beach or slopes. And many vacationers have the same thought: “Gee, wouldn’t it be great if we owned a place like this?”

With improvements in the economy and housing market, the second home that seemed out of the question a few years ago may now be within reach. But is it a good idea as an investment?

Experts in real estate, personal finance and taxes urge some hard thought before taking the plunge. A second home can produce a wonderful family tradition or turn into a stress-inducing money pit.

A second home is best viewed as a luxury item, not an investment or cheap vacation option, says Alison Bernstein, founder of the New York relocation consulting firm Suburban Jungle.

“It is less expensive to stay in hotels in various destinations than it is to upkeep a home, including the hidden expenses of caretaking, overall operations of a home and property taxes,” she cautions. “However, for those that are able to enjoy it, it is definitely worth it.”

Sales figures for 2015 aren’t in yet, but 2014 was stunning, with the most vacation home sales since 2006, according to the National Association of Realtors. Sales of more than 1.1 million units in 2014 exceeded 2013 sales by more than 57 percent. Rising home prices and stock market gains stoked a market flooded with baby boomers nearing retirement, the association says. The median vacation home sold for $150,000 to a buyer with $94,380 in annual household income.

The upside is clear: Decorate as you like, leave your clothes and toys, and use the property whenever you want – maybe even retire there someday. And if you have unlimited use, you needn’t gnash your teeth over every rainy day. Many buyers imagine gathering the extended family – the generations building memories together.

On the other hand, a second home is unquestionably a financial burden. Even if you can pay cash to avoid mortgage costs, there are property taxes, insurance and maybe association fees. Maintenance costs can be high if you must hire a pro for every little job you’d do yourself at home. All those costs are likely to rise over time.

Then there are headaches, such as making trips or hiring someone to prepare the home for the season or close it up afterward. Doing chores yourself can take the fun out of a getaway.

As an investment, a vacation home is uncertain. The housing crisis of a few years ago showed how dangerous real estate investments can be. Since a vacation home, unlike a primary residence, is not a necessity, prices can plunge when demand evaporates in an economic downturn.

“Though you may have equity in the second home, you should not look to it as a proper investment for your future retirement because you may not be able to access the equity quickly when you need to,” says Melinda Kibler, certified financial planner with Palisades Hudson Financial Group in Fort Lauderdale, Florida.

One vacation destination can be very different from others, so experts urge deep research on factors like price trends, the pace of new building, and access to interstates, airports and amenities like beaches, ski slopes, restaurants and natural wonders.

“You should talk with real estate agents and definitely speak with other property owners in the area,” says Mark Buckalew, senior vice president of D.A. Davidson & Co. investor group in Pocatello, Idaho. “You can look on Zillow at historic prices. Don’t just rely on the person trying to sell you the property.”

In 2014, 30 percent of vacation homebuyers paid cash, the Realtors’ association says. Though mortgage rates are low these days, it’s generally harder to qualify for a loan on a second home than for a primary residence. You might need a down payment of 20 percent or more, even though 10 percent or less might be enough to buy a full-time home. A higher down payment reduces the lenders risk if the borrower defaults, which is considered more likely with a second home.

“Second home loans generally require more money down and a better credit score than owner-occupied home loans,” says John Lazenby, a real estate agent and president of Orlando Regional Realtor Association. “Of course, lenders look carefully to ensure that second-home buyers are financially capable of paying two mortgages, and [they] have formulas to calculate for shortages in expected rental income.”

Many vacation home shoppers plan to rent the property out part of the time to offset costs, and this has become easy with sites like Vacation Rentals by Owner and Airbnb. Fees for such services are much lower than those of rental managers, who may charge commissions as high as 25 percent.

Keep in mind, though, that rental income is highest and most dependable during the “high season” months you’d most want to use the property yourself, like winter in Florida.

Mortgage interest and property taxes are deductible on the federal return regardless of whether you rent. If you do rent, insurance, maintenance and even some heating, phone and cable charges can be deductible. But the rules are tricky.

“If you use the property for the greater of 14 days or 10 percent of the time rented, you are considered to have used the residence personally and must allocate expenses between the rental income and personal use,” says Allen Falke, a tax attorney with Mirick O’Connell law firm in Massachusetts. Many of the expenses apportioned to personal use will not be deductible.

That’s just an example, as the rules have many twists and turns. Also, some deductions are not allowed for taxpayers subject to the alternative minimum tax, and profits from selling a second home are taxed as capital gains.

Since you don’t know for sure how much rental income you could earn or how many expenses will be deductible, consider buying only if you can afford the property without these considerations.

For many people, even if the finances are acceptable, the vacation home decision hangs on personal issues: Given all the responsibilities, will this really make you happy? Do you want to vacation in the same place year after year? Will your kids and grandkids really come as often as you hope? Will your stomach churn with every late-night call from a renter? Can you live with financial setbacks without kicking yourself for buying the property?

“If you’re going to have friends and family join you, you want to make sure it’s easy and inexpensive for everyone to visit,” says Jim Moran, director of sales at Victory Ranch, a vacation destination in Utah.

“Buyers should also consider their stage of life and that of their children to ensure they are going to be able to actually use the home the amount they are envisioning for many years,” Lazenby says. “For example, a family with young children may find that their use of the home declines as the kids become immersed in sports.”

Bottom line: A vacation home is a long-term commitment. For many buyers, the payoff is well worth it, but if your dreams don’t come true, you could be stuck with high costs and responsibilities for years.

Maintenance Tip: Caulking Your Bathroom

Regular maintenance on your home is important to keep up with on a consistent basis.  It not only protects your home, but also when it comes time to sell it, it shows potential buyers that your home has been well-maintained and makes a lasting impression.

Quick Bathroom Tip:

One of the simplest things you can do is re-caulk your bathroom vanities, sinks, showers, toilets and trim on a yearly to bi-yearly basis.  The caulk in your bathroom is quick to wear out because of it’s daily use.  It is important to help prevent water from penetrating the cracks in your shower and causing mold.

It is a simple project, all you need is a caulk gun, matching caulk and a razor blade or paint scraper.  All of these can be picked up at your local home improvement store.  To keep caulk looking good and working properly, its important to scrape the old caulk off first with a razor blade or paint scraper.  This is time consuming, however, it is a very important step.   Putting layer on top of layer not only makes it look bad, but also reduces the effectiveness.  You can be pretty aggressive when you are scraping the old caulk off, don’t worry about removing a small amount of grout in the process.

Once you have removed the old caulking, make sure that the surface is clean and dry.  The next step is to apply a bead of caulking to all of the seams.  In the shower, you will want to make sure to apply caulking to the edges of the floor or tub, to all of the corners, to any glass doors you might have as well as to benches or shelves.  You can use multiple colors of caulking to acheive the desired effect.  For instance, if you have a glass or metal framed door, you may want to use clear caulking there and then colored caulking in the corner of the shower.

Once you have applied a bead of caulking, you can use your finger to smooth it down and push it into the cracks.  It helps to have your finger slightly damp.  You may need to run your finger over the seam multiple times to achieve the desired effect.  Keep a damp rag handy so you can wipe your finger off.  Once you have completed the job, try to allow the caulking to dry for 24-48 hours before using your shower again.  It will make your bathroom look brand new!

-Anne Skinner